Finished syncing a full bitcoin core node not long ago and set up lightning network. Have not opened any payment channels yet because my concern is inbound liquidity. What I’m wondering is. How to go about it without just opening random channels.
My main goal is to support decentralization. Just to set up one reliable node that can route day by day transactions. Is there a way to avoid much dependence on centralized swap services? Would like to avoid third parties if possible.
I don’t mind the kyc. Even me personally I don’t and have never done non kyc transactions. I totally wouldn’t judge anyone who does. Main concern is I don’t support any weakening of the network. I don’t like anything that helps or uses services that are too centralized and vulnerable to government intervention. Plus the fees and limitations. Mostly the fees.
Has anyone had experience and success with submarine swaps, like peerswap or lightning loop. It seems like a lot and wonder if very many just don’t get into it.
I completely understand you. Running your own Lightning node with the goal of supporting decentralization is a fantastic step. And your concern about inbound liquidity is the main challenge every node operator faces, especially when trying to avoid centralised intermediaries.
As you mentioned, the "inbound liquidity" problem is like having a shop open but no cash in the till to give change: you can send payments but struggle to receive them from others. Let's look at how to tackle this and which tools can help.
🔧 Decentralised strategies for inbound liquidity
PeerSwap – Peer‑to‑peer rebalancing
PeerSwap is a tool that should fit your approach well. It's a plugin that allows direct rebalancing between peers using atomic swaps, without needing an on‑chain Bitcoin transaction. This drastically reduces on‑chain fees, makes moves almost instant, and removes central intermediaries.
Lightning Loop – From the creators of Lightning
If you prefer a more established solution backed by the teams building the network, Lightning Loop (from Lightning Labs) is a non‑custodial submarine swap service that helps you rebalance liquidity between the main chain and the Lightning network.
· Loop Out – converts funds from your Lightning channel to on‑chain Bitcoin, freeing up inbound capacity without closing the channel.
· Loop In – does the reverse, sending funds from the main chain to your Lightning channels.
Buying channels (Liquidity Ads) – The decentralised marketplace
Another alternative is to "buy" inbound liquidity in a decentralised way. You can use peer‑to‑peer liquidity markets like Amboss Magma or Lightning Pool, which let you connect with Liquidity Service Providers (LSPs) without going through a centralised exchange.
· Amboss Magma – the largest liquidity marketplace on Lightning, easy to use and node‑implementation agnostic.
· Lightning Pool – integrated into the LND suite, uses a scoring system, though it usually requires a bit more technical knowledge.
Submarine swaps – The technical foundation
At their core, submarine swaps are what make all these tools possible. They are a type of trustless atomic swap that moves value between the on‑chain layer and the Lightning network using HTLCs (Hash Time‑Locked Contracts), guaranteeing atomicity. The solutions mentioned (Loop, Boltz) are concrete implementations of this concept to solve liquidity.
💡 Best practices for running a reliable node
· Open larger channels with well‑connected nodes – instead of many small channels, open a moderate number with good capacity. Look for well‑established, reputable nodes for effective connectivity.
· Optimise your routing fees – charging for the use of your channels is essential for sustainability and balance. Adjust your routing fees and use tools like charge‑lnd to set dynamic policies.
· Combine tools to automate – as your operation grows, automation helps. A good combination is PeerSwap for quick, cheap peer‑to‑peer rebalancing and Loop for larger adjustments that involve the main chain.
· Circular rebalancing – a manual technique where you send a Lightning payment to yourself through the network, using your node's "send to self" function or a trusted friend.
🚀 Upcoming innovations
· RailsX (Amboss) – a decentralised exchange (DEX) native to Lightning that enables atomic peer‑to‑peer swaps, further decentralising capital flow on the network.
· Liquid Swaps (Boltz) – their Autoswap service automates rebalancing using the Liquid sidechain, offering very low fees and a "just works" solution to maintain liquidity.
· Multi‑channel – new multi‑participant channels that don't require inbound liquidity are being researched, which would radically improve capital efficiency in the future.
Managing the liquidity of a Bitcoin node can be complex at first, but with practice it becomes routine. The key is to start with a strategy, test the tools, and adjust your parameters little by little.
If you have any further questions along the way, I'm here to help. Best of luck with your node!
🔗 Useful links
· Lightning Loop
· Amboss Magma
· PeerSwap GitHub
· Lightning Pool
· Boltz
And most importantly, the guides by @DarthCoin (https://darth-coin.github.io/) will help you a great deal in this space. They are an invaluable resource for anyone running a Lightning node, from beginner to advanced.
Never eard of these? Is your llm hallucinating or can you share some referneces about this?
Have fun going broke! BTC does not need your support. If it did, it would not have made it this far. Be selfish, and the network (including your piece of it) will thrive!
Yea, but why would you want to? Lightning is a batch payment protocol. It lets you make many offchain payments that "batch" into a single large onchain payment. This happens when you close channels or do swaps. Swaps are better since you can keep using the channel. You can also swap in/out to other assets like LBTC which have better onchain privacy options than BTC.
Then LN isn't for you. Every channel you open is adding a third-party into your relationship. Your channel peers can censor you, they can more easily probe your node for channel balances than other peers that are 2+ hops away from you, they can close your channel at the worst time making you wait for weeks or pay high fees. The way you mitigate this is by choosing your peers wisely (trustful) or putting measures in place to limit your exposure (watchtowers, redundant node hardware, tuning your node parameters to limit attacks, etc) or having so many peers that you become the centralizing force (hub and spoke).
Start with you. Do you use LN already? You can probably save some sats compared to using a LSP or wallet with high fees. However, you'll have to learn and take on responsibility for your sats/channels in ways that are hidden from normal LN users.
Use the sats you save on fees to pay for an AI subscription. LN is complex and full of edge cases, its difficult to keep it all in your head (even for an expert). LLMs can hold that context easily and they can tell you exactly what to run to achieve your LN goals.
Have fun going broke. Onchain BTC records will exist forever and running an LN node has a high onchain footprint. Just wait until some tyrant takes power, and you don't want to be the low-hanging fruit when the next executive order 6102 sends the gooberment goons after you and your sats!
I get your point about incentives, and I agree that LN works best when people act in their own interest. That said, I don’t think “supporting decentralization” and being selfish are mutually exclusive. Running a well-connected, reliable routing node can align both goals if it’s done sustainably.
On swaps and batching, that makes sense. I’m just trying to understand how much I can do without relying heavily on specific providers. My concern is more about concentration risk, I'd avoid that.
that’s a bit overstated. Yes, channels introduce counterparties, but there’s still a spectrum between:
For inbound liquidity specifically, I’m looking at options like:
I’m mainly trying to understand what people have found works in practice without defaulting to big LSPs.
On KYC: fair point about footprint, but that’s more of a personal tradeoff.
If you’ve actually run a routing node for a while, I’d be interested in what worked best for you in terms of getting inbound liquidity early on without overpaying in fees.
Whether you "overpay" in fees depends entirely on your expected earnings that this new inbound will earn for you
I've spend millions of sats on getting inbound, but the earnings have made those expenses worthwhile. LN node is a business, the sooner you look at it like a business, the sooner you'll correct your understanding and actually sustain a node long term. The vast majority of node-runners give up after they make a few bad bets. They blame "the network" and "centralization" and "bad design" before they admit that they didn't understand the game they're playing enough to be profitable at it.
I think the distinction depends on choice vs. force. You choose your peers and you choose which swap providers to use. Furthermore, you can be a peer yourself! Or run your own swap service! The problem happens when you are forced to rely on services that are "approved" in a top-down manner whether thru licenses or state-sponsored certificates, etc. The fact there are relatively few swap providers is due to economies of scale and specialization, not because the state only gives out a handful of licenses or some top-down reason.
Consider that the big LSPs have earned their place because the service they provide is actually good (i.e. the free market has selected which services to use on your behalf)
But you will find a competitive edge using any means of getting cheap liquidity (again cheap is relative to expected earnings).
If you could analyze the network and find the optimal strategy without getting your feet wet, then there would be no arbitrage left to exploit in the network. Your moat in the network is earned thru trail and error and having better information than others.
Are you moonlighting as Darth's sidekick 🤣🤣🤣
My preferred swap provider is zeus' boltz instance
https://swaps.zeuslsp.com/
Loop is a little quirky, LL way overcomplicated it.
But you don't need to have a balanced channel from day one, just open a channel to a good peer and as you spend that creates inbound.
I like Zeus, I'll check this out